SodaStream Is More Bronco Than Seahawk

SodaStream hits another 52-week low today.

This isn't the way that SodaStream(NASDAQ:SODA) probably drew it up in the playbook, but the soda industry disruptor is hitting fresh 52-week lows the day after its Super Bowl ad aired.

Let's be fair: SodaStream isn't at a new low because of the ad. The stock has been moving lower since the company followed up a poorly received third quarter with a dreadful fourth-quarter showing. However, it probably didn't help that SodaStream gambled by having its ad featured during the fourth quarter of last night's game. This would have been prime real estate if it had been a competitive game, but the blowout likely had a lot of people ducking out of their Super Bowl parties early to gear up for the workweek.

Some will argue that it doesn't matter. SodaStream had already milked more value out of its spot than most advertisers by having its ad initially banned. Unlike the prior year's commercial that had to be replaced entirely, all that SodaStream had to do yesterday was scrape away Scarlett Johansson saying, "Sorry, Coke and Pepsi" to make this year's spot good to go.

The notoriety of having a spot banned worked. SodaStream uploaded the uncensored clip to YouTube a week ago, and this morning the video surpassed 10 million views.

So where does SodaStream go after the unfortunate timing of its Super Bowl ad?

This has not been a good start to the year for SodaStream. The shares surrendered 26% of their value last month, fueled by the warning that the company would barely break even during the holiday quarter. To put it in Super Bowl terms, SodaStream's been playing more like the Broncos than the Seahawks last night. It's been missing snaps, misreading coverages, and generally getting shredded.

The year doesn't have to end the way it started for SodaStream. Analysts still see healthy growth in 2014 and beyond, but it's hard to take Wall Street's optimism seriously until it overcomes the factors that squeezed margins to the point of nearly squeezing all of the profitability out of the holiday quarter.

A good early catalyst will be if the Johansson spot improves SodaStream's standing. It didn't feature any celebrities in earlier spots, and the sheer volume of star power seen during last night's commercials shows that marketers believe consumers respond to famous endorsers.

SodaStream's at a new 52-week low, but if the pop star does to its fundamentals what its namesake beverage system does to tap water, it won't be long before things get fizzy again.

Author

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.
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